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Investments in Debt and Equity Securities | 12 Months Ended
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Dec. 31, 2011
Investments in Debt and Equity Securities [Abstract] |
Investments in Debt and Equity Securities | Note 2: Investments in Debt and Equity Securities The amortized cost and fair values of securities classified as available-for-sale were as follows:
| December 31, 2011
|  |  | Gross |  | Gross |  |
| Amortized |  | Unrealized |  | Unrealized |  | Fair
| Cost |  | Gains |  | Losses |  | Value
| (In Thousands)
U.S. government agencies | $20,000 |  | $60 |  | $— |  | $20,060
Collateralized mortgage obligations | 5,220 |  | — |  | 380 |  | 4,840
Mortgage-backed securities | 628,729 |  | 13,728 |  | 802 |  | 641,655
Small Business Administration |  |  |  |  |  |  |
loan pools | 55,422 |  | 1,070 |  | — |  | 56,492
States and political subdivisions | 145,663 |  | 5,478 |  | 903 |  | 150,238
Corporate bonds | 50 |  | 245 |  | — |  | 295
Equity securities | 1,230 |  | 601 |  | — |  | 1,831
| $856,314 |  | $21,182 |  | $2,085 |  | $875,411
| December 31, 2010
|  |  | Gross |  | Gross |  |
| Amortized |  | Unrealized |  | Unrealized |  | Fair
| Cost |  | Gains |  | Losses |  | Value
| (In Thousands)
U.S. government agencies | $4,000 |  | $— |  | $20 |  | $3,980
Collateralized mortgage obligations | 8,311 |  | 183 |  | 814 |  | 7,680
Mortgage-backed securities | 590,085 |  | 10,879 |  | 1,753 |  | 599,211
Small Business Administration |  |  |  |  |  |  |
loan pools | 60,063 |  | 851 |  | — |  | 60,914
States and political subdivisions | 99,314 |  | 378 |  | 4,075 |  | 95,617
Corporate bonds | 49 |  | — |  | 28 |  | 21
Equity securities | 1,230 |  | 893 |  | — |  | 2,123
| $763,052 |  | $13,184 |  | $6,690 |  | $769,546
Additional details of the Company’s collateralized mortgage obligations and mortgage-backed securities at December 31, 2011, are described as follows:
|  |  | Gross |  | Gross |  |
| Amortized |  | Unrealized |  | Unrealized |  | Fair
| Cost |  | Gains |  | Losses |  | Value
| (In Thousands)
Collateralized mortgage obligations |  |  |  |  |  |  |
Nonagency variable | $5,220 |  | $— |  | $380 |  | $4,840
Mortgage-backed securities |  |  |  |  |  |  |
FHLMC fixed | $18,667 |  | $1,577 |  | $— |  | $20,244
FHLMC hybrid ARM | 50,517 |  | 3,220 |  | — |  | 53,737
Total FHLMC | 69,184 |  | 4,797 |  | — |  | 73,981
FNMA fixed | 21,071 |  | 1,504 |  | — |  | 22,575
FNMA hybrid ARM | 41,614 |  | 2,556 |  | — |  | 44,170
Total FNMA | 62,685 |  | 4,060 |  | — |  | 66,745
GNMA fixed | 9,826 |  | 372 |  | 1 |  | 10,197
GNMA hybrid ARM | 487,034 |  | 4,499 |  | 801 |  | 490,732
Total GNMA | 496,860 |  | 4,871 |  | 802 |  | 500,929
| $628,729 |  | $13,728 |  | $802 |  | $641,655
Total fixed | $49,564 |  | $3,453 |  | $1 |  | $53,016
Total hybrid ARM | 579,165 |  | 10,275 |  | 801 |  | 588,639
| $628,729 |  | $13,728 |  | $802 |  | $641,655
The amortized cost and fair value of available-for-sale securities at December 31, 2011, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| Amortized |  | Fair
| Cost |  | Value
| (In Thousands)
One year or less | $1,566 |  | $1,568
After one through five years | 1,580 |  | 1,608
After five through ten years | 13,135 |  | 13,497
After ten years | 204,854 |  | 210,412
Securities not due on a single maturity date | 633,949 |  | 646,495
Equity securities | 1,230 |  | 1,831
| $856,314 |  | $875,411
The amortized cost and fair values of securities classified as held to maturity were as follows:
| December 31, 2011
|  |  | Gross |  | Gross |  |
| Amortized |  | Unrealized |  | Unrealized |  | Fair
| Cost |  | Gains |  | Losses |  | Value
| (In Thousands)
States and political |  |  |  |  |  |  |
subdivisions | $1,865 |  | $236 |  | $— |  | $2,101
| December 31, 2010
|  |  | Gross |  | Gross |  |
| Amortized |  | Unrealized |  | Unrealized |  | Fair
| Cost |  | Gains |  | Losses |  | Value
| (In Thousands)
States and political |  |  |  |  |  |  |
subdivisions | $1,125 |  | $175 |  | $— |  | $1,300
The held-to-maturity securities at December 31, 2011, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| Amortized |  | Fair
| Cost |  | Value
| (In Thousands)
One year or less | $840 |  | $904
After five through ten years | 1,025 |  | 1,197
| $1,865 |  | $2,101
The amortized cost and fair values of securities pledged as collateral was as follows at December 31, 2011 and 2010:
| 2011 |  | 2010
| Amortized |  | Fair |  | Amortized |  | Fair
| Cost |  | Value |  | Cost |  | Value
| (In Thousands)
Public deposits | $463,832 |  | $475,622 |  | $388,456 |  | $393,261
Collateralized borrowing |  |  |  |  |  |  |
accounts | 235,323 |  | 237,576 |  | 263,778 |  | 264,450
Structured repurchase |  |  |  |  |  |  |
agreements | 65,658 |  | 67,498 |  | 66,755 |  | 68,202
Other | 1,600 |  | 1,678 |  | 5,527 |  | 5,621
| $766,413 |  | $782,374 |  | $724,516 |  | $731,534
Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at December 31, 2011 and 2010, respectively, was approximately $172.6 million and $298.8 million which is approximately 19.67% and 38.77% of the Company’s available-for-sale and held-to-maturity investment portfolio, respectively. Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary. The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011 and 2010:
|  | 2011
|  | Less than 12 Months |  | 12 Months or More |  | Total
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
Description of Securities |  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
|  | (In Thousands)
Collateralized mortgage |  |  |  |  |  |  |  |  |  |  |  |
obligations |  | $3,760 |  | $(110) |  | $1,460 |  | $(270) |  | $5,220 |  | $(380)
Mortgage-backed securities |  | 61,720 |  | (365) |  | 91,824 |  | (437) |  | 153,544 |  | (802)
States and political |  |  |  |  |  |  |  |  |  |  |  |
subdivisions |  | 6,436 |  | (44) |  | 7,381 |  | (859) |  | 13,817 |  | (903)
|  | $71,916 |  | $(519) |  | $100,665 |  | $(1,566) |  | $172,581 |  | $(2,085)
|  | 2010
|  | Less than 12 Months |  | 12 Months or More |  | Total
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
Description of Securities |  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
|  | (In Thousands)
U.S. government agencies |  | $3,980 |  | $(20) |  | $— |  | $— |  | $3,980 |  | $(20)
Collateralized mortgage |  |  |  |  |  |  |  |  |  |  |  |
obligations |  | — |  | — |  | 1,809 |  | (814) |  | 1,809 |  | (814)
Mortgage-backed securities |  | 231,524 |  | (1,753) |  | — |  | — |  | 231,524 |  | (1,753)
States and political |  |  |  |  |  |  |  |  |  |  |  |
subdivisions |  | 56,221 |  | (2,328) |  | 5,257 |  | (1,747) |  | 61,478 |  | (4,075)
Corporate bonds |  | 8 |  | (24) |  | 14 |  | (4) |  | 22 |  | (28)
|  | $291,733 |  | $(4,125) |  | $7,080 |  | $(2,565) |  | $298,813 |  | $(6,690)
Other-than-Temporary Impairment Upon acquisition of a security, the Company decides whether it is within the scope of the accounting guidance for beneficial interests in securitized financial assets or will be evaluated for impairment under the accounting guidance for investments in debt and equity securities. The accounting guidance for beneficial interests in securitized financial assets provides incremental impairment guidance for a subset of the debt securities within the scope of the guidance for investments in debt and equity securities. For securities where the security is a beneficial interest in securitized financial assets, the Company uses the beneficial interests in securitized financial asset impairment model. For securities where the security is not a beneficial interest in securitized financial assets, the Company uses the debt and equity securities impairment model. The Company does not currently have securities within the scope of this guidance for beneficial interests in securitized financial assets. The Company routinely conducts periodic reviews to identify and evaluate each investment security to determine whether an other-than-temporary impairment has occurred. The Company considers the length of time a security has been in an unrealized loss position, the relative amount of the unrealized loss compared to the carrying value of the security, the type of security and other factors. If certain criteria are met, the Company performs additional review and evaluation using observable market values or various inputs in economic models to determine if an unrealized loss is other than temporary. The Company uses quoted market prices for marketable equity securities and uses broker pricing quotes based on observable inputs for equity investments that are not traded on a stock exchange. For nonagency collateralized mortgage obligations, to determine if the unrealized loss is other than temporary, the Company projects total estimated defaults of the underlying assets (mortgages) and multiplies that calculated amount by an estimate of realizable value upon sale in the marketplace (severity) in order to determine the projected collateral loss. The Company also evaluates any current credit enhancement underlying these securities to determine the impact on cash flows. If the Company determines that a given security position will be subject to a write-down or loss, the Company records the expected credit loss as a charge to earnings. During 2011, the Company determined that the impairment of a nonagency collateralized mortgage obligation with a book value of $1.8 million had become other than temporary. Consequently, the Company recorded a total of $615,000 of pre-tax charges to income. During 2010, no securities were determined to have impairment that had become other than temporary. During 2009, the Company determined that the impairment of certain available-for-sale securities with a book value of $8.5 million had become other than temporary. Consequently, the Company recorded a $4.3 million pre-tax charge to income during 2009. This total charge included $2.9 million related to the nonagency collateralized mortgage obligation that was also determined to be impaired during 2011. Credit Losses Recognized on Investments Certain debt securities have experienced fair value deterioration due to credit losses, as well as due to other market factors, but are not otherwise other than temporarily impaired. The following table provides information about debt securities for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income.
| Accumulated Credit Losses
| 2011 |  | 2010
| (In Thousands)
Credit losses on debt securities held |  |  |
Beginning of year | $2,983 |  | $2,983
Additions related to other-than-temporary losses |  |  |
not previously recognized | — |  | —
Additions related to increases in credit losses on debt |  |  |
securities for which other-than-temporary |  |  |
impairment losses were previously recognized | 615 |  | —
Reductions due to sales | — |  | —
End of year | $3,598 |  | $2,983

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- Definition Tabular disclosure of investments in certain debt and equity securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27405-111563 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Equity Security -URI http://asc.fasb.org/extlink&oid=6511694 -Topic 320 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27161-111563 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Debt Security -URI http://asc.fasb.org/extlink&oid=6509901 -Topic 320 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 115 -Paragraph 3, 19, 20, 21, 22, 137 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27232-111563 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27357-111563 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27290-111563 + Details
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